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For Release — Tuesday,
February 26, 2002

TAX CUTS WILL HELP NEW YORK'S ECONOMY 'KEEP
ROLLING,' WALSH SAYS

ALBANY
New York State enjoys a much stronger competitive position in the current
national slowdown than during the recession of the early 1990s, and further
tax cuts will help the state's economy "keep rolling," Business
Council President/CEO Daniel B. Walsh told the Legislature's fiscal committees
today.

"To get our economy back on the right track, we need to keep rolling
with the strategies that made us strong," Walsh said in testimony to
the Senate Finance Committee and Assembly Ways and Means Committee.

"In the early 1990s, our job growth ranked near the bottom of all the
states," Walsh said. "At the end of the decade, we were a national
leader."

The difference, Walsh said: Governor Pataki and the Legislature have cut
taxes, reformed workers compensation and created important new economic development
programs such as JOBS Now and Empire Zones. New York can capture its share
of the nationwide investment and job growth that will take place after the
recession ends if the state continues to cut taxes, promote high-tech development
and take other steps to be more competitive, he said.

The Business Council's highest priority for 2002 is supporting New York City's
efforts to rebuild its economy in the wake of the September 11 attacks, Walsh
said. He urged legislators to extend and expand the state's investment tax
credit for securities brokerage and dealer activities, to show Wall Street's
decision-makers that New York will be a competitive location for the industry
over the long run. He also endorsed making Empire Zone benefits available
to businesses that were forced to relocate from lower Manhattan to other areas
of the state, and providing parity in the Empire Zone program by locating
a zone in every county.

The Council's other top tax priorities are adopting single factor sales apportionment,
and repealing the alternative minimum tax. Currently, corporations pay New
York State tax based on their jobs and property in the state, so that their
tax bills rise when they add jobs or make capital investments in New York.
Single sales factor apportionment would base tax bills only on a company's
sales in the state, creating a greater incentive for employers to invest and
add jobs in New York. A study last year found that single sales factor apportionment
would help create an additional 133,000 jobs in the state, more than paying
for any lost revenue due to the change. The alternative minimum tax limits
the value of the state's investment tax credit; repealing it would enhance
the incentive for manufacturers and securities firms to invest in the Empire
State.

Walsh applauded Governor Pataki, Senator Ronald Stafford and Assembly Majority
Leader Paul Tokasz for proposing reform of the railroad property tax. A recent
report by the Public Policy Institute, The Business Council's research affiliate,
said New York has lost 11,000 high-paying railroad jobs in the last 20 years,
partly because rail taxes in the state are seven to 26 times as high as those
in neighboring states. He called for reduction in other taxes, including those
on telecommunications and on estates, and for approval of the mandate-relief
proposals Governor Pataki made in his Executive Budget.

The state's recent investments in high-tech research and development will
pay off economically, Walsh said. Noting that 41 states are targeting biotechnology
and other high-tech programs, he urged the Legislature to work with Governor
Pataki, private employers and research universities to create "the finest
technology initiative in the nation."